Access to clean water is a basic human right that remains unfulfilled in many parts of the world. Despite several efforts to alleviate this problem, there are still millions of people without access to clean water. Indonesia’s government acknowledges the necessity of financing innovation to improve clean water access. In a recent announcement, the government emphasizes the need to identify and fund innovative solutions to address the country’s pressing water crisis. The government recognizes that current efforts, if continued, will not be sufficient to meet the need for clean water. This article will explore the government’s move to finance innovations that may provide a solution to the country’s water crisis.
The Public Works and Public Housing Ministry has emphasized the need for innovative financing schemes to improve people’s access to clean water through the piping system. This step is necessary to reduce the burden on the state budget and prevent complete reliance on public funding. According to the Director General of Public Works and Housing Infrastructure Financing at the ministry, Herry Trisaputra Zuzna, the development of clean water distribution using the pipe system is costly, necessitating a perfect financing formula to cover every aspect.
Water is considered the source of life, and thus, equitable access to it should be assured through sustainable and affordable financing solutions. Zuzna’s statement was made during a workshop held under the World Water Forum in Bandung, West Java, where strategies to enhance clean water access were being discussed. Zuzna further stated that to achieve optimal access rates to clean water, innovative financing schemes focused on public-private partnerships (PPP) should be developed.
Zuzna revealed that currently, the access rate for clean water with the new piping system is limited to around 20.6 percent of the public. There is, therefore, a need to formulate adequate financing solutions for the remaining 80 percent.
The National Mid-Term Development Plan (RPJMN) indicates that the cost of increasing clean water access rates from 20 percent to 30 percent would amount to Rp 123.4 trillion (US$8.04 billion) over five years. Zuzna explains that reaching the 80 percent target would require an investment of more than Rp 1 quadrillion.
The Ministry expressed a plan to involve private companies that will provide the expertise and required funds to initiate the provision of clean water. Private sector involvement would alleviate the burden on the state to provide funding and expertise to acquire clean water, thus enabling the government to concentrate on improving other essential sectors of the economy.
Zuzna mentioned that financing solutions with the private sector present some level of uncertainty, which is why the Ministry is tasked with providing clear business plans. It will enable private companies to have a reference point on their potential return on investment, which is the primary concern of most private ventures.
The West Java Regional Secretary, Setiawan Wangsaatmaja, mentioned that despite West Java having a good record of clean water accessibility, several aspects need improvement in supplying water through the piping system. The government will require an investment of around Rp 20 trillion (US$1.3 billion) by 2035 to enhance clean water accessibility adequately. As such, blended financial innovation, which combines both public and private funds, has become a reliable source of funding.
In conclusion, enhancing people’s clean water access through the piping system will require sustainable and innovative financing solutions, mainly through PPPs. The Public Works and Public Housing Ministry remains committed to ensuring that equitable and affordable access to clean water is achieved nationwide while attracting private sector investment.
